Pengelly-Emtage v Lee

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
COURT OF APPEAL

Case Title:	Pengelly-Emtage v Lee
Citation:	[2016] ACTCA 44
Hearing Date:	4 November 2014
DecisionDate:	8 September 2016
Before:	Penfold, Burns and Ross JJ
Decision:	1. The appeal is dismissed. 2. The appellant is to pay the respondent’s costs.
Catchwords:	DAMAGES – General Principles – appeal by plaintiff from award of damages for negligence arising from motor vehicle accident – whether primary judge erred in declining to award damages for loss of earning capacity – whether primary judge gave adequate reasons in choosing between contradictory expert opinions – adverse credibility findings in relation to evidence of appellant and his mother – onus of establishing injury productive of economic loss – appeal dismissed.
Cases Cited:	O’Brien v Noble [2012] ACTCA 13; 6 ACTLR 132
Parties:	Dean Hilary Pengelly-Emtage (Appellant) Trenton Charles Lee (Respondent)
Representation:	Counsel Mr A Muller (Appellant) Mr W Fitzsimmons (Respondent)
Solicitors Maliganis Edwards Johnson (Appellant) DLA Piper Australia (Respondent)
File Number:	ACTCA 40 of 2013
Decision under appeal:	Court: ACT Supreme Court Before: Sidis AJ Date of Decision: 12 June 2013 Case Title: Dean Hilary Pengelly-Emtage v Trenton Charles Lee Citation: [2013] ACTSC 76

THE COURT:

Introduction

The appellant had been a passenger in his mother’s car in August 2008 when it collided with a car driven by the respondent, who had failed to give way at the intersection of the Monaro Highway and Mugga Lane in the ACT. The respondent had admitted liability for the accident, but disputed the appellant’s claims of injury, disability, loss and damage arising from it.

On 12 June 2013, Sidis AJ awarded the appellant damages of $60,949, and costs, against the respondent.

Background

Her Honour summarised the background to the case as follows:

6.The plaintiff was 16, almost 17 years old at the time of the accident and 21 years old at the time of the hearing.
7.He was born prematurely in September 1991. At the age of two years he was diagnosed with Kawasaki disease with potential consequences to his cardiac health, although none were detected to the date of the hearing. He was diagnosed with Irlen's syndrome, a condition that caused reading problems through the inability to recognise characters printed in black and white on a page. The plaintiff obtained specially coloured spectacles to assist in correcting this condition.
8.The plaintiff left school early in 2005 at the age of 13, or Year 8 of his high school education. Thereafter he received no formal education. For the balance of his education, Mrs Pengelly-Emtage, a primary school teacher, left exercises for him to complete during the day and he watched historical or documentary DVDs.
9.In September 2007, at the age of 16, the plaintiff began work on a casual basis in a child care centre that Mrs Pengelly-Emtage established. The centre provided before and after school care for primary school children from kindergarten to year 6. From March 2008 the plaintiff was paid on a full time basis. He was employed in the child care centre at the time of the accident.
10.The plaintiff claimed that at the time of accident he was in good physical and mental health, in full employment that returned him a significant income, and leading a happy and fulfilling life.
11.He claimed that from the day of the accident he suffered from intractable pain in his head, neck, arms and back. He claimed that he continued to work at the child care centre with difficulty and out of necessity to keep the business going and that after the centre was sold he was unable to find work because of his physical limitations. He claimed that his physical pain and disability affected his mental health and that he suffered from depression.

At trial, the appellant had claimed:

(a)general damages for disability caused by psychological injury, pain and restricted movement in certain parts of his body resulting from the accident;
(b)damages for loss of income-earning capacity; and
(c)damages in respect of past and future domestic assistance and treatment expenses.

The primary judge awarded the appellant:

(a)$50,000 for general damages;
(b)$1,000 for past domestic assistance;
(c)$5,199 for past out-of-pocket expenses; and.
(d)$4,750 as interest;

Her Honour declined to make any award in respect of past or future loss of income‑earning capacity.

The appeal

In July 2013, the appellant filed an appeal against the primary judge’s order for damages, specifying the following grounds of appeal:

5.1Her Honour erred in finding that the plaintiff was prior to the subject accident suffering from "cognitive impairment and developmental delay affecting his intellectual capacity" such that his pre-accident employment prospects were not capable of assessment.
5.2Her Honour erred in rejecting the evidence of a cervicogenic basis for the plaintiff’s continuing headaches.
5.3Her Honour erred in rejecting the opinion of Dr Skinner that the plaintiff suffered accident related major depression.
5.4Her Honour erred in making no allowance for future wage loss where:-
5.4.1 The evidence established a capacity for paid employment prior to the date of the accident;
5.4.2 There was no evidence that the plaintiff had been able to return to any form of durable employment following the closure of his mother's business;
5.4.3 The weight of the evidence supported the conclusion that the plaintiff, as a result of the accident, suffered a diminution in earning capacity that was or might be productive of financial loss.
5.5Her Honour failed to provide any or any sufficient reasons for rejecting the weight of the medical evidence as to work capacity.

Submissions

The appeal, in effect, challenges only her Honour’s refusal to make any order in respect of loss of income-earning capacity. There were two aspects to that challenge.

First, the appellant said that her Honour had incorrectly dealt with the general evidence about his earning capacity before and after the accident. Secondly, her Honour was said to have dealt inadequately with the evidence relating to the appellant’s claim to have suffered psychiatric harm.

Counsel for the appellant noted that the appellant bore the onus of establishing an injury productive of economic loss, but that the respondent would have borne an onus in relation to any claim that an established diminution in the appellant’s earning capacity would have arisen anyway for reasons other than the accident.

Loss of earning capacity – general

Primary judge’s conclusions

Before dealing with the claim for damages for loss of earning capacity, the primary judge considered the claim for general damages, saying at [107]:

I therefore decided that the plaintiff was to be compensated for general damages on the basis that he suffered a musculo-ligamentous or soft tissue injury to his cervical spine leading to headaches that were at times severe in nature. I considered that this condition was essentially resolved by the time the plaintiff ceased treatment by Dr Di Dio in February 2009. I also accepted that the plaintiff suffered nervous shock at the time of the accident and that this condition was resolved by the time of his examination by Dr Griffith in October 2008. I rejected his claim of further psychiatric injury.

The primary judge’s findings about the appellant’s claim for general damages fed into his claim for economic loss in several ways. In relation to that latter claim, her Honour said:

109.At the time of the accident the plaintiff was employed in his mother's child care centre. He was 16, almost 17 years old, with extremely limited education and no qualifications in child care. However, he and Mrs Pengelly-Emtage said that the recently established business was progressing well and they planned to open further centres, one of which was to be managed by the plaintiff.
110.To be able to do this, it would have been necessary for the plaintiff to obtain an appropriate qualification in child care. The plaintiff described this as a "Certificate III" qualification. Mrs Pengelly-Emtage proposed that he first undertake a TAFE course in small business management before proceeding to obtain his child care qualification.
111.Mrs Pengelly-Emtage said that prior to the accident the plaintiff functioned fully in the child care centre, assisting with the set up and cleaning of the premises, the preparation and provision of food for the children and participating in and supervising the activities of the children. The plaintiff said he worked 27.5 hours per week prior to the accident. Mrs Pengelly-Emtage said he worked 22.5 hours per week. He worked longer hours, up to 10 per day in school holiday periods.
112.The plaintiff's taxable income was assessed in 2008 as $14,191; in 2009 as $77,063; and in 2010 as $78,650. The group certificate issued for 2011 disclosed an income of $63,403.
113.Mrs Pengelly-Emtage acknowledged that the income recorded as having been earned by the plaintiff from the time he was placed on a salary did not reflect his income earning capacity as a junior and unqualified employee. She said the plaintiff was paid a share of the income of the business. It was argued for the plaintiff that this effectively placed him in a position where he was in partnership with Mrs Pengelly-Emtage in the business. I did not accept this proposition. It was clear that this was an income splitting arrangement, not uncommon in family businesses.
114.Although she owned and was responsible for the operation of the business, Mrs Pengelly-Emtage was extremely vague about the income that the plaintiff might expect to receive if he were treated on an arms length basis. There was no evidence from Mrs Pengelly-Emtage or any other person with experience in the child care field concerning the income the plaintiff might expect to earn if he obtained the necessary qualifications. There was no evidence that he had overcome the cognitive impairment and development delay that affected his intellectual capacity to the point where he would obtain the necessary qualification to operate a child care centre.
115.Further, although the tax returns indicated that the plaintiff was paid a significant income, there was no evidence of the amount he actually received. He was required to pay out of his salary one half of the rent on the property in which he lived and sums for food. The plaintiff said he was paid weekly in cash. He did not remember how much money he was given. He did not have a bank account and he spent all of the money he was given buying items such as DVDs at the local shops. There was no evidence that Mrs Pengelly-Emtage placed any of his salary in a savings account on his behalf.
116.This would suggest that Mrs Pengelly-Emtage considered [the] plaintiff’s true income earning capacity to be at the level of pocket money only and supported the defendant's argument that the plaintiff at the time of the accident had little, if any, capacity to earn income in the open market and outside the protected and supervised environment of the business operated by his mother.
117.I therefore rejected the proposition that as an arms length employee he would have earned the $18 to $20 per hour that Mrs Pengelly-Emtage paid to other employees, none of whom suffered from the impairments faced by the plaintiff.
118.Acknowledging his intellectual limitations, the plaintiff argued that his income loss should be assessed on the basis that his ongoing disabilities deprived him of the opportunity to participate in unskilled, heavy labouring work. He instanced his attempt to work as an independent contractor installing insulation into the walls of buildings under construction. He said he could not manage the work because of his physical pain, that he was slower in carrying it out than other contractors and that on his last day he collapsed from pain and remained in a dark building for 45 minutes unable to summon assistance because of paralysis.
119.This submission overlooked the evidence that the plaintiff exhibited behavioural problems that necessitated that from the age of 13 years he be sheltered from society and supervised.
120.I accepted that there was authority that established that the first step in determining the claim for loss of income earning capacity was to decide what the pre-accident capacity was. The next step was to decide whether any loss or diminution in income earning capacity was or might be productive of financial loss: Medlin v State Government Insurance Commission (1955) 182 CLR 1; Graham v Baker (1961) 106 CLR 340; Stove v Hall [2008] ACTCA 21.
121.The defendant accepted that he was responsible for establishing that any injury suffered by the plaintiff was not productive of loss or diminution of income earning capacity. In this respect the defendant placed much emphasis on the argument that the plaintiff before the accident required a protected environment in which to work so that he was not involved in interaction with other adults and was closely supervised. The defendant maintained that this placed severe limitations on the plaintiff’s income earning capacity before the accident and that there was no change in this position as a result of the accident.
122. The plaintiff was examined by Dr Pascall, occupational physician, at the request of the defendant. Her report was not placed in evidence. At the plaintiff's invitation, I drew the inference that her report would not have assisted the defendant in mounting these arguments: Jones v Dunkel (1959) 101 CLR 298.
123.Notwithstanding these principles of law, there remained on the plaintiff the obligation to provide some evidence as to his income earning capacity. In this case, there was none. Mrs Pengelly-Emtage was not able to tell the court what she would have paid the plaintiff as an arms length employee.
124.The plaintiff argued that, having regard to the evidence that he was able to work in the child care centre without apparent difficulty up to the date of the accident, the court should conclude that he no longer suffered from the difficulties that were identified at the time he was withdrawn from education. He argued that the medical reports did not indicate that he could not function normally in society.
125.I did not accept that, in the absence of updated assessment, the court could ignore the problems faced by [the] plaintiff in adolescence. There was no evidence, even if the plaintiff had the intellectual capacity to obtain the necessary child care qualification, of what his income might have been. There was no evidence that he had overcome the cognitive and intellectual impairments and the behavioural difficulties that were documented when he was 12 and 13 years old to the point where he had prospects of obtaining unskilled labouring work outside a protected environment such as that provided prior to the accident by Mrs Pengelly-Emtage. There was no independent assessment of the restrictions, if any, on the plaintiff’s capacity to continue to work in a child care centre as he did for three years after the accident.
126.To some extent the assessment of the plaintiff s income earning capacity both before and after the accident was academic because he returned to work after two days. Although he and Mrs Pengelly-Emtage claimed that he continued to work with difficulty, taking time off as required, sometimes full days and sometimes a few hours, nothing was deducted from his salary. In fact, his salary increased after the accident.
127.The plaintiff claimed loss of income only from 1 July 2011 when the business was sold and he became unemployed. This was at a time after, on my assessment, the plaintiff was able to establish that he continued to suffer physically or psychiatrically from the consequences of the accident.
128.In any event I would have rejected the plaintiff’s claim of loss of income earning capacity for the following reasons:
1   He did not, as claimed, make any serious attempt to find work after he gave up the work of installing insulation in July 2011. Having said that he made unsuccessful applications for work at stores such as Coles, Woolworths, Go Lo and Aldi, the plaintiff agreed that in fact he inquired only about the availability of work at the Aldi store. A person at the store told him that if he had a history of injury, his application would not be considered. He did not ask for work at the other stores because he decided that they would adopt the same attitude. He made only one other inquiry about work, that being to the Goulburn Council. He was told to check for advertisements in the newspapers. He did this but no jobs were advertised.
2   The plaintiff did not register with any employment agency. He had a mindset that CentreLink looked down on persons who were unemployed and he refused to register for unemployment benefits. He appeared to be unaware that CentreLink also provided assistance with finding employment.
3   I accepted the defendant's argument that the plaintiff’s income earning capacity was seriously limited by his lack of education and his cognitive and intellectual impairments. I did not accept that the plaintiff had no prospects of employment but, in my view, the maximisation of those prospects depended upon his being provided with the assistance of experts who specialised in placing persons with disability in the structured employment situations that their circumstances demanded. In the absence of evidence from a person qualified in this field, it was not possible to assess the plaintiff’s prospects of employment, the income that he might expect to receive as a result or the extent to which his income earning capacity was diminished by reason of the accident.
129.I therefore made no award for loss of income earning capacity, past or future.

Pre-accident employment

For this purpose, the key points in the appellant’s history were as follows:

(a)He had been taken out of school by his mother at the age of 13. This was a decision made by his mother (rather than as a result of medical or other advice or necessity), and appeared to have been made by reference to behavioural and intellectual difficulties suffered by the appellant since early childhood.
(b)At 16, the appellant had begun working as a casual employee at a childcare centre operated by his mother.
(c)The accident had happened about 11 months later. The appellant had returned to work at the childcare centre two days after the accident, and continued to work there until his mother sold the childcare centre nearly three years later, in mid-2011.

The appellant’s case was that before the accident he had a genuine capacity for employment, but that the accident had severely diminished that capacity, and that from the time when his mother sold the business, that diminution in capacity had produced economic loss.

The appellant and his mother gave evidence of the kind of work done by the appellant as a staff member of the business.

There was evidence of the rates of pay for other employees of the business. There was evidence from the appellant’s mother that if she had employed a similarly unqualified and inexperienced person of the same age as her son in her business, she would have paid that person the applicable minimum wage.

The appellant’s mother gave evidence that the wages she had notionally paid the appellant exceeded the real value of his work. There was also evidence that the appellant had no relevant qualification for working in a childcare centre, and counsel conceded on appeal that his employment in such a centre would not have satisfied any regulatory requirements in terms of minimum numbers of employees with appropriate qualifications.

Counsel conceded that at the time of the accident, the appellant was a 16-year-old boy whose only employment before the accident had been in his mother’s business, and that this had been because of what counsel referred to as “the circumstances of his life prior to the accident”(which we take to have been a reference to the matters referred to in [7] and [8] of the primary judge’s reasons and quoted at [3] above), but said that despite this, there was evidence of the appellant’s capacity to perform work of a type that would be remunerative in a similar position in another childcare centre.

Counsel conceded that adverse findings made by the primary judge about the credibility of both the appellant and his mother affected the weight to be given to their evidence. However, he said, while these findings affected the significance of the evidence about the appellant’s pre-accident earning capacity, they did not negate that evidence, because the findings were expressed to apply to particular aspects of the evidence and particular matters in issue.

The adverse findings made by her Honour were as follows:

39.I also noted that the plaintiff, who, understandably might not have the insight necessary to appreciate that he was doing so, considerably understated his cognitive and intellectual deficiencies both before and after the accident. Mrs Pengelly-Emtage also understated the plaintiff's pre-accident problems, in my view, deliberately, in order to advance his claim.

...
81.The plaintiff did not complain of pain in his back, shoulders, arms and legs until several months after the accident and his complaints thereafter were intermittent and inconsistent. The plaintiff said this was because the main focus of his complaint was on his very severe head pain. I did not accept this explanation for two reasons.
82.The first was that Dr Griffith, three months after the accident, and Dr Brooder, on both occasions when he examined the plaintiff, reported that he displayed no evidence of injury in these parts of his body. Dr Griffith comprehensively examined and tested the plaintiff’s head and neck, upper limbs and shoulder girdles, thoraco-lumbar spine and lower limbs with minimal complaint of pain or restriction. I found that it was not credible that these results would have been available if the plaintiff was suffering at that time from the severe pain and restriction, particularly in his shoulders and arms, that he claimed affected him from the day of the accident.
83.Dr Griffith noted in his second report that there were marked changes in these areas of the plaintiff’s body. They caused him to remark that there was a level of embellishment in the plaintiff’s report of symptoms.
84.The second reason for rejecting the plaintiff’s explanation for the inconsistency in his evidence and presentation was that I did not accept that he was telling the truth on this and on other aspects of his claim. I already noted that I considered the plaintiff understated the difficulties he faced prior to the accident. In claiming the accident caused these additional difficulties, I decided that he overstated the difficulties he faced after the accident. In general I concluded that the plaintiff’s dishonesty on these aspects was deliberate and intended to overstate the consequences of the accident.
85.I concluded therefore that the evidence did not support a finding that the plaintiff suffered any injury to his shoulders, arms, back or legs.

...
91.The plaintiff said that he had not received treatment because, since he and his mother moved to Goulburn in early 2012, he had been unable to find a general practitioner in Goulburn, a city that expanded so rapidly that it was undersupplied with medical practitioners. He said that his one attempt to register with a general practitioner was unsuccessful when the doctor concerned became ill on the day of his appointment.
92.This evidence was patently untrue. The plaintiff agreed that he twice consulted general practitioners in Goulburn after his relocation to that city. On one occasion the practitioner [signed] a document required to secure his driving licence. On another, Goulburn Hospital referred him to a general practitioner for treatment of a sprained ankle. He agreed that on each of these occasions he was able to see the doctors concerned without difficulty.
93.I did not find it credible that a young man with symptoms of such severity would abandon the search for medical assistance to identify their cause and provide some relief.

Counsel said that, even having regard to these credibility findings, there was positive evidence that the appellant had before the accident been performing “real work”, with an economic value, in his mother’s profitable business, and that other employees, albeit employees with childcare qualifications, had been performing similar work in the business.

Counsel noted that, in cross-examination, neither the appellant nor his mother had been challenged as to the nature of the services provided by the appellant as an employee of the childcare business. Nor had the appellant’s mother been cross‑examined about whether, if the appellant had not been available to take on the relevant work, she would have employed someone else with the appellant’s capacities in her business.

Counsel for the appellant in written submissions said that the evidence supported a finding that the appellant “had demonstrated an economic capacity in the open labour market prior to the subject accident”. When asked about the evidentiary basis for this proposition, counsel responded that he could not put it higher than this:

that this was a real business being operated by the appellant’s mother. It was a business that was running profitably and in respect of which she had a number of paid employees performing tasks similar to the appellant. On that basis, it is my submission that it was established on the evidence that he had demonstrated a capacity to perform work of a type that would be remunerative in a similar position in another child care centre, and I put it no higher than that ...

Counsel also conceded that there had been no evidence of any kind of independent assessment of the work done by the appellant in the childcare centre. We would also observe that given the “protective” nature of his employment in his mother’s business there was no evidence that a similar position was available in another child care centre.

Post-accident employment prospects

In the childcare centre

After the accident, the appellant had continued to work in his mother’s childcare centre for some three years, until she closed down the business. During that period, the wages he received from the business in fact increased. However, the appellant and his mother gave evidence that although he continued to work in the childcare centre, his capacity for useful work was diminished.

In evidence, the appellant said that, except for one or two days during that period of almost three years after the accident, he continued to work the same hours as he was working before the accident, but that he did so “with extreme difficulty”. He said:

So that from 2008 to 2011 you continued to work in the childcare centre doing your duties didn’t you? – – – In a diminished capacity. It took me longer to do what I used to and it was harder to do what I used to do.
...
You were cleaning up after [the children] when they left? – – – I would most of the time make the other employees who are being paid to do that, do that because that’s what they were being paid for, whether they left – whether [they] finished it or not was up to them but they needed to at least pick up the majority of it due to the fact that you can’t do it all, before I could do it all. I could do everything that was available that I needed to do. Afterwards you needed to employ two or three more staff just to keep up with what we used to do.
Well, your mother had to employ two or three more staff, that was her business, wasn’t it? – – – Yes she had to employ more to replace what I was before the accident. So, I could do it all before the accident and afterwards it took me longer. It was harder and it wasn’t to the standard that it once was.

Counsel did not draw to our attention any other evidence that the appellant’s loss of capacity had to be addressed by the employment of extra staff.

The appellant also gave evidence that it was his reduced capacity, and the reduced capacity of his mother (a matter not clarified in other evidence) that led to the closure of the business. He said:

So, it wasn’t a case of you having to stop work at the childcare centre because you couldn’t do it, your work finished at the childcare centre because it closed, correct? – – – No, because I couldn’t continue to do my work at the capacity that I was able to do it before, we couldn’t continue running it.

After closure of the childcare centre

There was also evidence that, after his mother closed down her business, the appellant had made one unsuccessful attempt to engage in employment in the open market, in the insulation installation industry. However, the primary judge had not been persuaded by the appellant’s other claims about looking for work (see [118] and [128], quoted at [12] above).

Failure to make findings about physical injuries

The appellant had complained of two separate kinds of physical consequences of the accident, being chronic headaches and pain in his back, arms, legs and neck or shoulders. Her Honour noted (at [76]) the difficulty of assessing the appellant’s claims of physical injury, noting “inconsistencies in [the appellant’s] presentation to doctors, treating and medico-legal, and marked diversity in the opinions that those doctors provided”. She pointed out that for every diagnosis made by one or more doctors, there was at least one doctor who rejected that diagnosis and offered a different diagnosis.

Her Honour concluded that the evidence did not support a finding of any injury to the appellant’s back, arms, legs, and shoulders, or any ongoing injury to his neck, mentioning in her reasons:

(a)that the claims of injuries to the back, shoulders, arms and legs were not made until several months after the accident (at [81]), even though the appellant was examined by Dr Griffith three months after the accident and by Dr Brooder seven months after the accident, and that after the claims were first made they were thereafter “intermittent and inconsistent”; and
(b)that no evidence of such injury was found by Dr Griffith or Dr Brooder (at [82]), although when Dr Griffith examined the appellant for the second time in 2012, he remarked that there was “evidence of embellishment” in the appellant’s report of symptoms (at [83]).

Her Honour also referred to her finding that the appellant’s evidence had understated his difficulties before the accident and overstated the level of difficulties after the accident and, in effect, that she did not believe the claims of injuries to his shoulders, back and limbs (at [84]). She concluded at [85]:

that the evidence did not support a finding that the plaintiff suffered any injury to his shoulders, arms, back or legs.

That is, the primary judge declined to find any injury to shoulders, arms, back or legs resulting from the accident.

As to the appellant’s claim of ongoing headaches, her Honour (at [86]) found that he had “suffered soft tissue or musculo-ligamentous injury in the region of his cervical spine that generated the headaches” he described, but noted questions about how long he had continued to suffer headaches and whether, if he still suffered such headaches, they were caused by the accident (at [87]).

Her Honour went on (at [88] to [90]) to find that the appellant had sought only intermittent medical treatment for headaches, and none since early 2012 when he and his mother moved to Goulburn, and rejected as untrue his claim that he had not sought help since then because he had been unable to find a general practitioner in Goulburn (at [91] to [93]).

The primary judge did not express a conclusion about the headaches at that point in her judgment, but at [107] (quoted at [11] above), she dismissed the claim that headaches had continued into the period for which economic loss was claimed:

I therefore decided that the plaintiff was to be compensated for general damages on the basis that he suffered a musculo-ligamentous or soft tissue injury to his cervical spine leading to headaches that were at times severe in nature. I considered that this condition was essentially resolved by the time the plaintiff ceased treatment by Dr Di Dio in February 2009.

Those comments constituted a finding (albeit not under the heading of “Loss of income earning capacity”) that the headaches caused by injury sustained in the accident had resolved by February 2009.

Counsel for the appellant also complained that her Honour had failed to consider or make any finding about the extent, if any, to which the injuries causing headaches should be accepted as likely to be productive of economic loss.

It is true that the primary judge did not make any explicit finding about the significance of the headache-producing injury in the assessment of post-accident earning capacity or economic loss. However, her Honour noted (at [126] and [127]) that:

(a)the question of the appellant’s income earning capacity before and after the accident “was academic because he returned to work after two days”;
(b)that nothing was deducted from his salary for that or any subsequent time off in connection with the accident;
(c)that in fact his salary increased after the accident; and
(d)that his claim for loss of income related only to the period from 1 July 2011 when his mother’s business was sold and he became unemployed.

Conclusion

Since the primary judge had found that the headaches had resolved by February 2009, there was no need for her Honour to consider, or make any finding about, the impact of those headaches in the claim for loss of income-earning capacity after 1 July 2011.

This appeal ground is not made out.

Psychiatric injury

The claim

The appellant claimed psychiatric injury, being major depression, resulting from the accident. Counsel said that although the primary judge had discussed the claimed psychiatric injury, her Honour had made no finding about that claim or about whether any such injury had produced or might produce economic loss.

The appellant’s claim in respect of psychiatric injury required several questions to be addressed:

(a)Whether the appellant was suffering a psychiatric illness, specifically major depression as diagnosed?
(b)Whether any such illness was a result of the accident?
(c)Whether any such illness had affected the appellant’s income earning capacity so as to produce economic loss?

Expert reports

Reports from two experts about the appellant’s psychiatric condition were in evidence. Her Honour at [95] commented that they were difficult to reconcile. This seems to have been the basis for counsel’s criticism.

We note in passing that there was evidence of a threatened suicide attempt the year before the accident, and that both doctors had incorrectly believed that this had occurred after the accident. However, this mistake did not seem to have any particular significance in the appeal.

Dr Samuel examined the appellant in February 2011. His report noted that, while there was a background of developmental delay and behavioural issues and, apparently, some “psychiatric treatment” in the past (mentioned by her Honour at [95]), there was no evidence of a psychiatric disorder at the time he was assessed by Dr Samuel (at [95]).

Dr Skinner, on the other hand, had diagnosed major depression arising from the motor accident.

The primary judge dealt with Dr Skinner’s evidence as follows:

98.Dr Skinner examined the plaintiff on 8 February 2013. In her opinion, at the time of her examination the plaintiff suffered from major depression as a direct result of the accident.
99. The difficulty with this diagnosis was that Dr Skinner was ill-informed. She was not informed of the background of developmental delay affecting the plaintiff’s cognitive and intellectual capacity, literacy and socialisation. She was not fully informed concerning the plaintiff’s withdrawal from formal education.

Her Honour indicated her conclusions about the claim of psychiatric injury by saying at [106]:

I had no doubt that the plaintiff himself blamed all of his problems on the accident. However, the claim of psychiatric injury must be supported by evidence. While there appeared to be a strong possibility that the plaintiff’s complaints of ongoing physical pain were somatic in nature, there was insufficient soundly based analysis of the plaintiff’s mental health to establish on the balance of probabilities that he suffered from psychiatric illness, the nature of any illness or the causal connection between any illness and the accident. This was particularly relevant, having regard to the plaintiff’s pre-accident background.

Counsel submitted, however, that her Honour failed to take the next step and articulate any conclusion about the claimed psychiatric injury, saying that although she had said that “there was insufficient soundly-based analysis of the plaintiff’s mental health to establish on the balance of probabilities that he suffered from psychiatric illness”, her Honour should have gone on to say, for instance, that the appellant had therefore failed to satisfy the onus on him to establish any psychiatric disorder on the balance of probabilities.

As far as we can see, this is effectively what her Honour did at [107] (quoted at [11] above) when she said “I rejected his claim of further psychiatric injury”.

Primary judge’s reasoning

However, the reasoning behind her Honour’s treatment of the claim of psychiatric injury affecting earning capacity was somewhat obscure.

The primary judge explicitly rejected Dr Skinner’s conclusion that the appellant “suffered from major depression as a direct result of the accident” on the basis that Dr Skinner was ill-informed about the appellant’s pre-accident history.

The following extracts from Dr Skinner’s report give some indication of the gaps in her knowledge of the appellant’s history:

Mr Pengelly-Emtage lives ... with his mother. He is unemployed. His mother is a primary school teacher.
Prior to the subject accident Mr Pengelly-Emtage was working with his mother in a childcare centre on five days per week, before and after school care. The centre was open during school holidays from Monday to Friday and closed for only one holiday period per year.
His duties had included preparing food and cleaning, first aid and supervising children. The maximum number of children was 30 in the morning and 50 in the afternoon. The centre employed his mother, himself and one other worker.
The business commenced in 2007 and was sold at the end of 2012.
...
Mr Pengelly-Emtage said that in spite of his lack of education, he had fairly good literacy and was good with computers. He said the reason he cannot find employment is because of his headaches and his headaches affect his concentration. After the motor accident, his mother said that his concentration was so poor at work that if he had been an ordinary employee she would have fired him.
...
Mr Pengelly-Emtage sleeps very little. He has no dreams but he is woken frequently by pain. He feels tired all the time, “that‘s the way of life”.
...
He had one job since the accident and that was with construction work. He was “nearly killed”. He said he lost all feeling. He was nearly paralysed for 45 minutes and then he called his mother on his phone. Finally he managed to get home and then quit the job the next day. He said this was because he was in so much pain.
...
Prior to the accident he liked swimming, bike riding and he used to walk up a 2km hill daily.

He enjoyed work at the childcare centre. However, he was somewhat of a recluse. He had no girlfriends. He had a girlfriend when he left school but they drifted apart.
Asked about his future, he replied, “What future?”
...
He has not been to an employment agency because he is in too much pain. ...
...
Mr Pengelly-Emtage was clearly distressed throughout the interview and his mood was depressed. Although he rejects the notion of a psychological approach to his pain and problems, I believe that he requires psychological intervention for treatment of his depressive illness and to assist him to deal with his pain and also with his prospects for employment, and social and recreational activities.
He is unemployed and socially isolated and he reports no sporting or recreational activities appropriate for his age group.
Mr Pengelly-Emtage described difficulties with authority as a child. He has limited education and has not worked in the open market. ...
Mr Pengelly-Emtage is suffering from Major Depression as a direct result of the subject accident. He reports that, prior to the accident he was coping and working effectively in the family childcare business. He was socially isolated, but he was physically active and engaged in walking, swimming and bike riding. Had the accident not occurred, he might have engaged in other recreational pursuits and developed age-appropriate relationships.

Dr Skinner was subsequently given copies of reports prepared by Dr Ian Crawshaw and Leanne Foley-Evans in 2004, and by Dr Doron Samuel in February 2011, and sent an email in response, including these comments:

I have since received two 2004 reports setting out the difficulties that Mr Pengelly-Emtage was experiencing during his developmental years. In my report I described the problems as reported to me by Mr Pengelly-Emtage. I am aware that he had problems prior to the motor accident. However, it is my understanding that he was functioning in a job and was engaged in a number of recreational activities prior to the accident. He might have been vulnerable to depression but he was working and functioning and has since decompensated.
...
The connection between his present diagnosis of Major Depression and the motor accident is that the accident precipitated Mr Pengelly-Emtage’s complaints of pain and disability and has led to significantly reduced functioning and Major Depression.

We do not disagree with her Honour’s view that Dr Skinner was not properly informed about the appellant’s circumstances.

The difficulty with her Honour’s explanation for rejecting Dr Skinner’s conclusions, however, is that the appellant’s pre-accident history was not obviously relevant to Dr Skinner’s contemporaneous diagnosis of major depression. Its relevance was to whether that illness was a result of the accident.

In our view, the primary judge had good reasons to reject Dr Skinner’s conclusion about the cause of the depression, but those reasons were not clearly articulated.

Dr Skinner diagnosed major depression largely attributable to the pain claimed by the appellant and the impact of that pain on his employability. Assuming the accuracy of the factual foundation sampled at [54] above, such a diagnosis would have been unsurprising.

If Dr Skinner’s conclusion of major depression of itself was justified by the appellant’s presentation to her in February 2013, in particular his reports of chronic pain and his resulting difficulties in finding work, and if that chronic pain could be attributed to the accident, then his resulting difficulties in finding work, and depression, could also have been attributable to the accident, irrespective of his pre-accident difficulties (although there would still have been a question whether those consequences would have sounded in anything except general damages).

However, her Honour had, for specified reasons, rejected both the appellant’s claim of ongoing pain from injuries to his back, arms, legs, and shoulders (at [33] above), and his claim of severe headaches extending beyond February 2009 (at [37] above).

The real significance of the appellant’s pre-accident history, and his post-accident employment history in the childcare centre, to her Honour’s assessment of Dr Skinner’s conclusions was that her Honour had, by reference to that history, rejected the appellant’s claim that his post-accident employability had been affected by the accident.

That is, the primary judge had concluded, in reliance on the other evidence she had received in the trial:

(a)that the appellant did not have significant chronic pain resulting from the accident; and
(b)that his employability had not been significantly reduced as a result of the accident.

In other words, her Honour had rejected the significant claims made by the appellant and relied on by Dr Skinner to diagnose major depression and to attribute that major depression to the accident. On that basis, her Honour was entirely justified in rejecting Dr Skinner’s conclusion. It is unfortunate that she did not articulate that reasoning.

In support of his submission that her Honour’s reasons for rejecting the claim of psychiatric injury were inadequate, counsel referred to O’Brien v Noble [2012] ACTCA 13; 6 ACTLR 132 at [20], specifically the quoted observations of Ipp JA that:

It is not appropriate for a trial judge to merely set out the evidence adduced by one side, then the evidence adduced by another, and then assert that having seen and heard the witnesses he or she prefers or believes the evidence of one and not the other.

Counsel conceded that Ipp JA’s comment did not refer to a case in which a choice needs to be made between two inconsistent expert reports, but submitted that, by analogy, it is not appropriate for a judge to summarise the evidence and then conclude that it is too hard to resolve the divergence between inconsistent evidence (or, presumably, that the inconsistent evidence is difficult to reconcile).

It is implicit in our conclusions at [64] above that her Honour did in fact “reconcile” the divergent evidence by rejecting Dr Skinner’s conclusion of a causal relationship between the diagnosed depression and the accident. As noted, her Honour’s reasoning could have been more clearly articulated, but we do not accept that it amounted to simply preferring the evidence of some expert witnesses over that of other expert witnesses. In fact, it was logically based on the conclusions her Honour had reached, and articulated, about the credibility of the appellant and his mother, the physical injuries resulting from the accident, and the impact of the accident on the appellant’s employability.

Counsel conceded that the appellant bore the onus of establishing that an injury caused by the respondent had produced a loss or diminution of earning capacity, although it would have been for the respondent to establish, if in issue, that any such loss or diminution of earning capacity would have occurred for some other reason irrespective of the injury. We note that, even apart from our conclusion that the primary judge did “reconcile” the inconsistent experts’ opinions by rejecting one of them for good if not fully articulated reasons, it would not have been unreasonable for her Honour to resolve any remaining difficulty by reference to whether the party bearing the relevant onus of proof had satisfied that onus of proof to the applicable standard.

Conclusion

The primary judge did not provide a sufficiently careful analysis of the impact, on Dr Skinner’s assessment, of the incomplete information available to her, and why her Honour considered that her assessment provided no basis for accepting that the appellant’s unemployability could be attributed to the accident. It is apparent from our analysis that there were weaknesses in Dr Skinner’s conclusions arising from her incomplete briefing, not necessarily in respect of her diagnosis of depression as such, but in respect of her willingness to attribute that depression to the results of the accident. Dr Skinner’s report, as well as assuming that the appellant had been functioning fairly normally before the accident and was not so functioning by the time she saw him more than four years later, accepted without question the appellant’s repeated claims of constant pain, claims which her Honour had dismissed (in the reasons quoted at [20] above).

In summary, there were good reasons for her Honour to dismiss the claim that psychiatric injury (specifically, major depression) had been sustained as a result of the accident and had contributed to the appellant’s unemployability by the time of the hearing, although without rejecting the actual diagnosis of depression. It is unfortunate that her Honour did not explain her reasoning more clearly, but given our view that her Honour reached the correct conclusion, the brevity of her explanation does not provide a ground for upholding the appeal.

Orders

The appeal is dismissed.

The appellant is to pay the respondent’s costs of the appeal.

I certify that the preceding seventy-two [72] numbered paragraphs are a true copy of the Reasons for Judgment of the Court.

Associate:

Date:

Citations

Pengelly-Emtage v Lee [2016] ACTCA 44

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O'Brien v Noble [2012] ACTCA 13

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[2016] ACTCA 44

8 September 2016